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Commercial bank money is designed via fractional-reserve banking , the banking practice where banks hold only a fraction of their deposits in reserve (as money and other highly liquid assets) and lend out the remainder, while keeping the simultaneous obligation to redeem all these deposits upon demand. As economies created, commodity money was ultimately replaced by representative money , such as the gold normal , as traders found the physical transportation of gold and silver burdensome. Silver coins had been used for midsized transactions, and as a unit of account for taxes , dues, contracts and fealty, even though copper coins represented the coinage of widespread transaction.
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